This article comes hot off the press following an overnight announcement by HM Government of “Government-backed insurance scheme to give boost to events industry”.
It will obviously come as news to the boastful duo of Chancellor of the Exchequer Rishi Sunak and Culture Secretary Oliver Dowden but the coronavirus pandemic first closed theatres and other events venues in the middle of March 2020.
Within weeks, leading figures in every part of the culture sector with Nica Burns in the vanguard were desperately calling for insurance to underwrite shows and protect the industry.
The triumphal tones in a government press release that announces the Live Events Insurance Scheme somehow neglect to note that its arrival from the beginning of September comes 18 months late.
Readers will be keen to learn the details but will generally be disappointed.
We do at least learn that this is “a world-leading government-backed insurance scheme worth over £750 million”. However, its scope is vague to say the least.
Apparently, it will cover live events such as Glastonbury and business conferences but there is no mention of the theatre sector.
It is to be hoped that the new scheme will cover theatres but it would have been nice to see this explicitly stated.
The press release is a gem. Approximately 5% of its space gives details of the plans, while the remaining verbiage is characteristically devoted to excessive praise of the government not only from its own members but also bigwigs in trade associations and commercial organisations, not to mention Lloyd’s of London.
Even better, to show how seriously Rishi Sunak is taking the issue, the press release offers a link to HM Treasury’s Flickr page on which it is possible to obtain photos of the Chancellor’s visit to London Wonderground!
The quote from Lloyd’s chief John Neal is significant, since what we do know is that this plan is not quite what most might have expected and wished for.
Those who choose to partake will have to pay two sets of insurance premiums to one of a number of selected underwriters and they could be the biggest beneficiaries from this scheme.
The first is for standard events cover and the second relates to coronavirus. In return, participants will have limited insurance cover where events are “legally unable to happen due to Government Covid restrictions”.
The government coverage, which looks reasonably generous, relates to the underwriting of pay-outs.
“If events do have to cancel, after organisers have covered the agreed excess, the government and insurers have an agreed a risk share per claim [sic]. This starts with government paying 95% and insurers 5%, progressing to them covering 97% and 3% respectively and finally government covering 100% of costs. The split depends on the losses incurred by the insurer from the scheme to date.”
Assuming that the plan does extend to theatres and other entertainment venues, there is still a series of big black holes that could prove very damaging.
To start with, the extent is unclear, since there is no definition of an “event”. To take one of many recent examples, the London production of Hairspray was forced to take an unintended break due to an outbreak of the virus. It is unclear whether for these purposes the event would be construed as the production or each individual performance?
If legislation changes and theatres are obliged to reduce capacity again, that will not be covered, while a significant risk of late cancellations by punters who succumb to illness or advice to self-isolate by government agencies or apps (the dreaded pinging) would also still be a pure, uninsured loss for venues.
Last week’s column covered the Edinburgh Festival and Fringe. Like so many of the major summer festivals, it takes place in mid-summer, and the events season winds down before the start of September.
The cynical have suggested that the Government’s introduction of this new scheme is deliberately scheduled to take it past the time when it could have proved particularly costly.
The good news is that the Live Events Insurance Scheme initially runs for a 12-month period, which will, at least, cover Edinburgh 2022, assuming that the constituent parts fall within any small print that is eventually published and those seeking to produce shows survive long enough to take advantage.